The effect of housing wealth shocks on work and retirement decisions

Publication date: Available online 10 October 2018Source: Regional Science and Urban EconomicsAuthor(s): Jaclene Begley, Sewin ChanAbstractUsing panel data from 2000 to 2012, we show that unanticipated zip code-level shocks to home values affect retirement, retirement reversals, and Social Security claims. Among older men, homeowners experiencing moderately negative housing price shocks are less likely to retire, more likely to reverse retirement in some cases, and more likely to delay claiming Social Security relative to those experiencing positive shocks. We find similar responses among specific subgroups of older women, though not in general. Overall, our results imply that adverse housing shocks have substantial influence on labor market participation for older individuals.

Source: Regional Science and Urban Economics - October 10, 2018 Category: Science Source Type: research